While encouraged by a resumption of domestic travel in Malaysia, Indonesia and the Philippines during the three-month period ended September 30, AirAsia said a spike in coronavirus cases in Malaysia and subsequent curbs had led it to reduce capacity in the country in October and November.
It halved its projected recovery rate in Malaysia to 31% of its pre-COVID-19 capacity by the year end, after already lowering it to 60% last month from 70-75% in August.
"There is a slight setback in Malaysia but we expect this to be short-lived and to bounce strongly in December," CEO Tony Fernandes said in a statement.
In Indonesia, it now expected be at 47% of pre-crisis capacity, versus a previous projection of 45%.
AirAsia India is expected to operate at up to 67% of pre-crisis capacity versus a previous projection of 65%.
For the Philippines, it expects to be at 13% of pre-COVID-19 levels, and maintained that its Thai operations are expected to exceed pre-COVID-19 capacity levels.
Fernandes said the company had disposed of spare engines to raise cash and is open to other potential monetisation opportunities.
He said it foresees sufficient liquidity in 2021 and expects air travel to bounce back mid-next year on hopes of the formation of travel bubbles and green lanes.
"We have high hopes that with the availability and accessibility of effective vaccines, AirAsia will soon paint the skies red again," he said in a statement.
AirAsia Group reported its fifth consecutive quarterly loss as the pandemic took its toll on travel in the third quarter.
It posted a net loss of 851.8 million ringgit ($209 million) for July-September quarter versus a loss of 51.4 million a year earlier.
Revenue fell 85.6% to 442.9 million ringgit.
AirAsia said it carried 1.9 million passengers in the third quarter, down from 13 million a year earlier, dropping its load factor measuring how full planes are by 18 percentage points to 66%.
($1 = 4.0850 ringgit)
(Reporting by Liz Lee and Mei Mei Chu; editing by Alexander Smith and Jason Neely)